Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 320 and 322 together.

Economic growth across Ireland, the EU and the Eurozone was somewhat subdued in 2023. Irish modified domestic demand – my preferred measure of the domestic economy – grew modestly by ½ a per cent in 2023. GDP in both the EU and Eurozone similarly grew by ½ a per cent last year, with the German economy notably recording a contraction of -0.3 per cent.

The outlook for both the domestic and European economies remains uncertain, and the Government is conscious of the challenges on the horizon. In its most recent forecasts published in February the European Commission revised down its GDP projections for Ireland and the EU for this year, mainly as a result of the weaker than expected growth seen at the end of 2023, and as monetary policy continues to impact on growth. My Department will update its macroeconomic forecasts as part of the Stability Programme Update later this month.

Downside risks to the outlook remain, and Ireland is facing many of the same headwinds as our European peers. An escalation of geo-political tensions and uncertainty surrounding the full impact of monetary policy tightening represent risks to the outlook, while there are potential upside and downside risks to inflation.

However, the Irish economy has displayed remarkable resilience in the face of the large and unprecedented shocks faced in recent years. The economy is facing into this year on solid footing with a record level of employment, and remains competitive on the international stage. Ireland’s reputation as a stable and pro-enterprise jurisdiction is reflected in the continued investment in the economy. The stock of foreign direct investment in Ireland stood at €1.3 trillion in the fourth quarter of 2023.

I am conscious of the need for Ireland to maintain its competitive position given the positive contribution of FDI to the economy. Indeed, the numbers employed in the multinational sector in Ireland last year are estimated at over 300,000 according to the IDA. Continued investment in skills and infrastructure will help Ireland to remain attractive in this regard, and this Government will continue to monitor risks to our competitiveness in the year ahead.